Analysis Of Supply Chain Finance Strategies Based On Accounts Receivable Factoring

Nowadays, Chinese small-and-medium-sized enterprises generallyface financing difficulties, the competition in banking becomes fiercer.Inthat case supply chain finance appears and grows rapidly. Accountsreceivable factoring is one of supply chain financing modes and has beenwidely used. It can solve problems which banks, small-and-medium-sizedenterprises, core enterprises face, which also can achieve multilateral winand enhance the whole supply chain efficiency and competitiveness.The domestic and foreign academic circles have made a lot ofresearch on accounts receivable factoring, but mainly in qualitative study,and less consider of combining supply chain with factoring. On the basisof the existing literature, this paper takes accounts receivable factoringinto the supply chain system considering each participant’s benefits anddecision-making. Through quantitative mathematical models the paperstudies the financing enterprise’s optimal accounts receivable financing decision, the core enterprise’s optimal order quantity and defaultprobability, and the bank’s optimal financing ratio.This paper first describes the accounts receivable financing modesand factoring development in our country on the basis of supply chainfinance. Secondly, through the expected profit model in a two-stage supplychain, it studies the financing enterprise’s accounts receivable transferdecision and the core enterprise’s optimal order quantity in the pursuit ofmaximizing the whole supply chain’s benefits, and verifies the relatedinfluencing factors on enterprises’ decisions by numerical examples.Thirdly, the bank’s expected profit model is made when facing exchangerate risk and credit risk in a transnational supply chain. It discusses thebank’s optimal financing ratio in the fixed and random exchange rate cases,and numerical examples verifies the relationship between the financingratio and related variables. Then, through a case analysis the necessity ofcombining factoring with supply chain is indicated. Finally, it makes asummary and proposes the future research direction.